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As meal prep booms, a shakeout looms

“People are starving each other out,’’ says an Oldsmar entrepreneur. Nationwide, average store revenues leave little after rent and expenses.

By MARK ALBRIGHT
Published August 2, 2006

[Times photo: James Borchuck]

Co-owners Robyn Oeth, left, and Dawn Nyman demonstrate Monday how their meal prep business, Foodies, operates. Foodies opened a year ago in downtown St. Petersburg and is part of a boom in preparing meals without planning, shopping or cleanup.

	[Times photo: Brian Cassella]
	Meals of chicken with vegetables are assembled at Dinner Done in Carrollwood.
	[Times photo: Brian Cassella]
	Sandy DePirro, left, of Citrus Springs gets some help preparing her meal from Dinner Done assistant manager Julie Cole at the 3-year-old Carrollwood business on Saturday morning.

Kim Wiezsycki  finished her monthly, two-hour ritual assembling a dozen family favorites: chicken Parmesan, chicken penne pasta and beef filets with mushroom Roquefort sauce.

“I am passionate about our family eating dinner together,’’ said the 34-year-old Carrollwood mother of two as she wheeled a cooler full of dinners out of Dinner Done. “This answers that nagging question — 'What’s for dinner?’ — an hour before we sit down. I just pull it out of the freezer.’’

Call them meal assembly or meal prep stores, but a new breed of meal solution is spreading to strip shopping centers.

The crowd of dual-income family members and stay-at-home parents flocking to them monthly is almost rivaled by the crush of entrepreneurs scrambling to get in the business. Nationally, the number of meal prep stores more than tripled in one year to more than 900 this summer. At least eight chains are peddling franchises in this industry that barreled out of the Pacific Northwest four years ago. But two-thirds of these stores are independent, one-of-a-kind outlets.

Such growth sounds like there’s oodles of demand. But the 561 stores open nationally in 2005 averaged less than $400,000 each in revenue. That’s barely enough to pay the owners anything after rent and expenses in what is designed to be a volume business. Meanwhile, the Easy Meal Prep Association, the industry trade group, forecasts 1,100 stores by the end of this year and annual sales of $270-million.

The Tampa Bay area is right in the crosshairs of the movement. The number of local meal prep outlets tripled in the past year to 21, with more coming.

“In places like Tampa Bay, we’ll learn soon if meal prep is a fad or a bona fide business trend,’’ said Nancy Kruse , an Atlanta food service marketing consultant.

Local owners expect a shakeout.

“It’s saturated to the point people are starving each other out,’’ said Carmen Tate, after two competitors opened near her Make n’ Take in Oldsmar. A third closed after a supermarket in the same shopping center blew the whistle on an exclusivity clause violation.

Meal prep works like the logic of time sharing. If you spend that much money on vacation in a nice hotel every summer, you could save by paying for 25 years’ worth up front. Meal prep places get about $200 for all the makings to compose 12 dinner entrees that each feed four to six people. All you do is assemble them in one-meal-at-a-time foil baking pans and fill the freezer. That’s $4 or less a serving.

It’s a no-worries time saver. No meal planning. No shopping. No chopping. No cleanup.

The biggest locally is Let’s Eat Dinner Inc., a Tampa company with six local stores and 15 franchised all told. It was founded by a Melissa Slack, a former IT sales executive, and Marni  Poe, who never returned to a law career at Holland & Knight after she left on maternity leave.

“We got in it because we both really needed a service just like this,’’ said Slack, whose stores that have been open more than six months are projected to hit $600,000 to $900,000 in annual revenue.

Because so few stores are chains, it’s an industry of imitators.

College-trained food production engineers, Dinner Done owners Dan and Audra Nasser  have had so many copycats show up as customers that they now stop anybody who starts snapping pictures of the prep facilities, storage room and equipment. They stumbled onto a guy on the Internet who took their name and equipment layout for a startup chain in the United Kingdom using photos he obtained from another knockoff meal prep rival in Sarasota.

“He said, 'Don’t worry, it won’t be at all like yours,’ ’’ said Audra Nasser. “The growth of this industry and all the hobbyists drawn to it is scary.’’
The Nassers, who opened their third store in Brandon, won’t be more specific than confirming the first store has revenues that are “in the millions’’ and needs 40 people to run. That includes a chef, a butcher and enough people to wash down every utensil after each sitting.

The industry average in contrast is less than $400,000 in annual sales and three workers. Many competitors locally are run on a break-even basis by as few as two partners who are the staff but have yet to take a salary.

No wonder all the discounting and tinkering with the formula.

Foodies opened a year ago in downtown St. Petersburg after two friends tried meal prep themselves.

“We figured we could do better,’’ said Dawn Nyman , who shares staffing with co-owner Robyn Oeth .

They dropped the standard eight-to-12-meal minimum to six, but will sell as few as two meals for $9. Reservations aren’t needed. Some retiree regulars drop by three times a week.

Tate’s Make n’ Take in Oldsmar loaded up on more kid-friendly dishes like meatloaf and meatballs.

“My husband and I love gourmet stuff, but I tired of making hot dogs or chicken fingers for my kids,’’ said Tate. “So we do family fare.’’

Other trends: Meal prep outlets are adding side dishes. Some sell fully assembled meals for pickup. That’s more than 20 percent of the business at Tampa’s Let’s Eat. Dinner Done is about to pack meals in dry ice for next-day delivery statewide.

There is a social component. So many customers unite with friends on their mealmaking missions that some stores book their entire place for private mealmaking parties at night. Let’s Eat put easy chairs in a lobby equipped with free coffee, quiche to nibble and, at night, wine.

“We want it to feel like a living room so people chat,’’ said Slack.

Skeptical experts wonder how long customers will keep returning.

“It’s a small but burgeoning field that stands a good chance of becoming a long-term niche once they separate out the good operators,’’ said

Mary Brett Whitfield, who heads the food practice at Retail Forward Inc., a Columbus, Ohio, retail think tank.

“Some people love it, and the social part gives it sticking power,’’ said Ron Paul, president of Technomic Inc., a Chicago research firm. “But how long will people keep going back before they realize it’s just a form of frozen food?’’

That doesn’t deter Carrollwood’s Kim Wiezsycki .

“I’ve come here every month for three years.”

STORES BOOM

- Meal prep businesses charge about $200 for all the makings to compose 12 dinner entrees that each feed four to six people. That’s $4 or less a serving.

- Nationally, the number of meal prep stores more than tripled in the past year to more than 900.

- The number of Tampa Bay area local meal prep outlets tripled in the past year to 21. More are coming.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

[Last modified August 1, 2006, 21:32:08]